The perennial conflict between market-hungry Big Tobacco and developing nations continues.
The latest round pits Philip Morris International, the world’s largest private tobacco company, against tiny Uruguay, a nation of 3.5 million residents whose gross domestic product amounts to roughly half of Philip Morris’ annual revenues. At issue is an Uruguayan law requiring that warning labels cover 80 percent of cigarette packs.
The tobacco giant claims that this violates Uruguay’s free-trade agreement with Switzerland, where the company has its operations center, and is pursuing its complaint before the World Bank. The grounds for the objection is that by partially covering up the Marlboro logo, Uruguay’s law amounts to expropriation of private assets without compensation.
Uruguayan President José Mujica dismissed the claim as an attempt to “complicate the life and sovereignty of a small nation that has the boldness to defend itself and try to defend the health of its people,” and said that his government will not surrender its laws despite the pressure.
Uruguay, which has high cigarette taxes and is considered one of the most aggressive nations in combating smoking, was also one of the countries featured in a lengthy new report from the Center of Public Integrity, detailing the industry’s efforts to tap foreign markets. In addition to Uruguay, the report covers attempts by the governments of Mexico and Russia to reduce their nations’ smoking habits.
For both tobacco companies and developing countries, the stakes are high. According to the report, more than three quarters of a projected 176 million worldwide tobacco-related deaths from 2005 to 2030 will occur in the developing world. For tobacco companies, lower to middle-income nations represent a growth market that can replace smokers scared off by successful public-health campaigns in the U.S. and Europe.
While the challenge for nations like Uruguay may seem daunting, governments like Mujica’s are drawing support from powerful sources. Michael Bloomberg, the billionaire anti-smoking mayor of New York City and the founder of the media company Bloomberg L.P., has pledged to provide legal research and other support for Mujica and his nation through the tobacco initiative of Bloomberg Philanthropies.
